IoT-Based Minimum Viable Product (MVP) Development

With real-world use, IoT products can bump into unexpected issues, functionality requests, and bugs. That’s why it’s so important to get your product out to users quickly, and IoT-based MVP development is the best way to make that happen.

Most products intended for the public market should launch their MVP as soon as possible. Even the best business analysis and preparation can’t reveal all the perspectives from which real users will view the product. Don’t be afraid to be less functional than others at first. The key is to deliver 20 percent of the functionality that will address 80 percent of the user’s pain points.

Kostiantyn Oliynyk

Head of IoT at Webbylab

In this article, we’re sharing insights, recommendations, and steps on IoT-based minimum viable product development. We’ll explore how to handle development efficiently, make a lasting first impression on users, and get them hooked on your product — all while making the most of that irreplaceable first interaction.

During the years our IoT department operated, we launched three of our own IoT products and helped multiple clients through the MVP stage.

• Our 2Smart Cloud platform, launched as an MVP, allowed us to collect user feedback and pivot to a new target audience. Ultimately, we transformed it from an IoT product launch platform to a versatile management tool for numerous IoT devices.
• Our ACS system Propuskator started with MVP controller integration into 2Smart Cloud, enabling hardware testing before public release. We then launched a limited-functionality MVP with only 20% of the features successfully fulfilling 80% of the administrator and user needs.
• Our client’s project, MyBox, a car battery charging station management and monitoring platform, used the MVP stage to collect real-world data and user feedback. We discovered new usage scenarios, including several predictive maintenance use cases, that influenced further development.
• Our 2Smart Standalone greenhouse automation system, launched as an MVP, leveraged a real-world deployment to grow into a comprehensive device automation and monitoring framework.
• Our IoT building automation system case, where we used 2Smart Standalone as a foundation, also started as an MVP. We created a comprehensive solution from a simple platform that supports numerous protocols and devices.

These are just several examples that demonstrate MVP’s effectiveness in gathering user feedback and improving IoT products. Read on to learn from WebbyLab’s experience and lead your project to success.

Mobile and desktop interfaces of the Propuskator access control system developed by WebbyLab

IoT-Based MVP Development: Basic Goals

When starting IoT-based minimum viable product development, businesses typically aim to:

• Test the product’s viability. If you are unsure whether your idea is feasible in the real world, the minimum viable product IoT is a way to go. By deploying your product’s simplified version, you can evaluate its practicality and potential acceptance in the market.
• Spend less money on product development. With an MVP, you focus on the core product functionality only. Therefore, you spend fewer resources than you would when building a full-scale IoT solution.
• Deliver the product faster. An MVP for IoT projects speeds up your time-to-market. Again, it’s because you’re working on the most critical features and can roll out your product right away.
• Handle initial customer research. Building IoT MVP allows you to research your target market early on. It’s also the way to evaluate user behavior and their first impressions of your product.
• Mitigate the risks beforehand. When working on your MVP, you identify your product’s limitations and challenges early in development. Owing to that, you can change your product strategy and avoid potential setbacks.
• Decide on the business model. An IoT MVP helps you shape your business model. It allows you to review your strengths and weaknesses and find viable revenue streams based on real-world feedback and usage data.

Key Steps to Develop an IoT MVP

Let’s explore what it takes to develop an IoT-based MVP. Here are the core stages you’ll need to follow:

1. Idea Definition and Goal Setting

Start by defining your IoT project’s value, ensuring your MVP accurately reflects it. Consider the following questions:

• What user problems or pain points can my MVP solve?
• How can my IoT solution benefit end users?
• What unique features can set my IoT product apart from competitors?
• Why should users choose my IoT solution over others?
• What KPIs will help me measure the MVP’s value?

Once you’ve answered these, set clear MVP goals — such as user coverage, target geographical areas, and data collection criteria.

Alexey Krol

Chief Business Development Officer

Consulted 30+ IoT startups to speed up time to market.

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2. Market Research

The next stage is to find out if your idea aligns with current market demands. To do this, identify your target customers and study your competitors. Your other tasks at this point include:

• Developing a strategic product roadmap
• Considering key MVP features and IoT architecture
• Handling compliance and regulations research, following GDPR, ISO/IEC 27001, and other legal requirements in your region

3. IoT Component Selection

Next, you should cover what your IoT-based MVP will consist of: 

Hardware Components

• Sensors. Temperature, humidity, light, motion, and others to collect data about the environment
• Actuators. Switchers, motors, valves, and others to perform actions based on the input from sensors
• Microcontrollers or microprocessors. To process the gathered data and control the IoT device
• Connectivity solutions. Cellular, Wi-Fi, Bluetooth, and others to facilitate data transmission across the IoT system

Pro tip! Choose the physical hardware based on your project’s specific context. For example, consumer electronics often require a polished and aesthetically pleasing design in addition to functionality, while industrial hardware may prioritize functionality over appearance. To ensure a smooth development process and avoid costly mistakes, many startups leverage professional IoT consulting services for guidance on hardware selection, software architecture, and overall IoT product strategy.

Pro tip 2! While this might seem trivial, designing casings, packaging, and branding can be both expensive and time-consuming. Consider this before you build an MVP IoT product.

Software Components

• Management and monitoring tools. To manage configurations and updates remotely
• APIs. To integrate and extend software functionality beyond device-specific tools
• User interface. To enable end users to interact with the IoT-based MVP

4. Hardware Design and Development

At this stage of IoT-based MVP development, you have two options for hardware design and development:

• Using off-the-shelf components
• Producing the device yourself (or with a manufacturer)

Let’s discuss each approach in greater detail.

Using Ready-Made Components

If possible, use ready-made hardware components for your MVP. This approach can save both time and money, especially if the core value of your product doesn’t heavily rely on custom hardware.

When selecting hardware components, strive for a compromise between cost and functionality. Aim to meet 80% of critical needs in the initial version, as covering every aspect may not be cost-effective at this early stage.

Manufacturing In-House or with a Partner

If your IoT product depends on custom hardware significantly, carefully select a manufacturer and plan the post-production device testing process. Don’t forget to ask for a detailed IoT project cost estimation and distribute responsibilities between development and manufacturing teams.

When developing your own hardware, make sure you:

• Determine the business requirements for the device
• Choose suitable components
• Draft the device’s blueprint

Pro tip! Start with a small initial production run to test and refine your concept. Develop device firmware simultaneously with the hardware manufacturing process. After successfully creating and testing the minimum batch, proceed to larger-scale production to mitigate potential manufacturing issues.

Start your product with an MVP for a controlled number of users and test the hardware. This will reduce the risks associated with a large initial production order. Offering users the exclusive opportunity to be the first to use the new product lets you gather friendly and highly useful feedback for improving subsequent batches of devices.

Alexey Krol

Chief Business Development Officer at Webbylab

Pro tip 2! Establish a quality control checklist early before the MVP launch. Ensure each produced device undergoes QC and is properly labeled by developers, testers, and manufacturers.

Additionally, consider packaging, labels, and other details like power supplies at this stage. Your goal is to make a comprehensive product kit, as your product is not just a device — it’s what users will see on the shelves and ultimately purchase.

Beyond Hardware: Creating Firmware in Sync

Developing firmware while your hardware is in production is highly effective. Critical processes to cover here include:

• Defining business requirements for firmware
• Grasping the cloud application’s operation
• Understanding key device components, especially the chip

Start firmware implementation by connecting it to the cloud if your device isn’t ready yet. Conversely, manage the hardware aspect if cloud development is still in progress.

If you need more information on device production, check out our article on IoT product development.

5. User Interface and Software Development

At this stage, you’ll begin developing the software for your MVP. This process includes the following:

1. Planning the MVP architecture if you haven’t done it in the earlier stages
2. Choosing the suitable tech stack
3. Setting up the development environment
4. Integrating IoT devices and sensors
5. Implementing communication protocols
6. Handling data storage and management
7. Covering the necessary security measures
8. Developing the user interface

Receiving user feedback is one of the pivotal aspects of IoT app development, offering insights into further full-fledged product creation. Consider multiple dimensions of feedback, including:

• User input
• System monitoring
• Sensor and IoT device data analytics
• Vital business metrics collection
• Log, error, and event tracking

Ideally, you should gather a dedicated group of beta users to give feedback on your IoT-based MVP software.

6. Data Collection

Data collection is another critical stage in IoT-based MVP development. Make sure you cover the following:

• Identifying the data sources (sensors, devices)
• Determining the types of data (environmental data, user interactions)
• Estimate the approximate data volume to prepare appropriate storage
• Streamline data transmission by implementing communication protocols
• Decide on data storage (cloud, device memory)

7. Testing and Iteration

At this point, test your Internet of Things MVP to find issues and bugs. Iterate based on user feedback and performance data to improve your product.

Given that MVP prototypes are typically tested in limited environments, it’s worth preparing for real-world usage conditions without immediate scaling. For example, if you plan to deploy 2,000 devices, it’s wise to calculate and test for peak loads equivalent to those 2,000 users operating their devices online. IoT software testing plays a crucial role in ensuring your MVP performs reliably under real-world conditions, identifying issues before full-scale deployment.

Using 2Smart Cloud to test and launch IoT devices

8. Deployment and Support

Once you test your minimum viable product for IoT, move on to its deployment. This stage typically involves training individuals responsible for IoT-based MVP implementation. It’s critical given that users often struggle with initial device pairing and setup despite clear documentation and intuitive user interfaces.

Address this issue by gathering a dedicated support team and implementation experts to assist users online and offline. Additionally, create a knowledge base and provide helpful materials to enhance the user onboarding process.

9. Monitoring and Maintenance

Finally, monitor your deployed MVP regularly to fix issues and bugs. Also, implement over-the-air (OTA) firmware updates and other maintenance mechanisms to ensure ongoing device upkeep and prevent potential failures.

Most importantly, remember that you can only make a first impression once. Hence, prepare thoroughly and present your best efforts without going overboard to avoid inflating the MVP’s cost unnecessarily.

IoT-Based MVP Implementation Drawbacks

The benefits of MVP implementation are undeniable — cost-efficiency, faster time-to-market, and initial customer research. Yet, there are several challenges you should prepare for before you build an IoT-based MVP:

• Limited functionality. MVPs typically evolve around several core features, which may leave some user expectations unfulfilled at the initial release.
• Scalability issues. As user bases and IoT data volumes grow, scalability becomes critical. An MVP may not be designed to handle the scaling requirements of a fully deployed IoT solution, which can harm the product’s performance.
• Limited device compatibility. IoT ecosystems may include diverse devices from various manufacturers. Ensuring that all these gadgets communicate effectively with your MVP may be another challenge.

Based on our experience launching both consumer and B2B products, we’ve identified the key components of a successful MVP and focus on implementing them for our clients. These include built-in monitoring systems, data analytics, internal admin panels, optimized device onboarding flows, and user communication channels. These features inevitably become necessary in any product, so we make sure to incorporate them early on, even if the client hasn’t considered them yet.

Kostiantyn Oliynyk

Head of IoT at Webbylab

Things to Avoid in MVP Development

If you aim to build an MVP IoT product of high value for your business and customers, avoid certain things during development. Let’s quickly go through them:

• Copied features. It can be tempting to mimic features from competitor products, thinking it’ll make your MVP more attractive. But the core thing here is to make your product exclusive. Originality will set your MVP apart, not the features users have seen a million times before.
• Unnecessary add-ons. Add-ons that don’t directly solve the core problem are usually unnecessary at the MVP stage. Stick to the basics that deliver real value, and save the extras for later.
• Blindly following user requests. Listening to user feedback is important, but you don’t have to compromise on every request. When you develop an IoT-based MVP, focus on the most critical needs first and make sure they match your product’s core purpose.

Choosing the Right Partner for IoT-Based MVP Development

Finding the right partner to build an IoT-based MVP is crucial if you want your project to succeed. Here’s what you should look for in a development partner:

• Expertise. Your ideal partner should know their way around IoT hardware, firmware, and software. Their expertise will give you confidence that they can handle IoT development effectively.
• Experience. A partner with many years of experience will surely have a better grasp of the common IoT challenges and solutions. So, check out their past projects to see if they’ve successfully built MVPs similar to what you’re aiming for.
• Technology capabilities. Your partner should have the tech stack and infrastructure needed to support your project. Only this way you’ll get high-quality IoT development services.

Cost and value. It’s important to stay within budget, but don’t just go for the cheapest option. Evaluate the value you get for your investment. A higher cost might be justified if it means better service quality.

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How Much Does It Cost to Build an IoT-Based MVP?

Now that you know everything about the IoT-based MVP development process, you may be wondering: what’s the cost? The price largely depends on the following:

• MVP project scope and complexity
• Hardware and software requirements
• Development team’s size, experience, and location

While the final price may differ significantly, the approximate IoT-based MVP development cost would be:

• Hardware — from $10,000, excluding production costs for the first batch of devices
• Firmware — from $5,000, including firmware development and integration with software
• Cloud backend — from $10,000 for setting up and developing a cloud platform for device management, admin tools, and user applications
• Admin panel — from $10,000 per panel for device and user management
• End-user application — from $15,000 for mobile applications on iOS and Android for device control, pairing, and monitoring

As a result, delivering an IoT-based MVP with basic functionality typically takes about three months and starts at $50,000.

WebbyLab Experience in IoT Minimum Viable Product Development

WebbyLab has firsthand IoT-based MVP development experience, and the Propuskator access control system is one of our best MVP examples. The project timeline was as follows:

• 4 months for the cloud and the admin panel’s initial version
• 2 months for mobile app development
• 2 months for device development and basic firmware

The Propuskator project took us approximately six months to reach a launch-ready state, costing around $50,000.

A prototype of a Propuskator controller

Initially, we envisioned an ACS with a transmitter, a B2B distribution model, and user subscriptions. Our MVP launch included:

• Hardware development. We ordered an initial batch of devices capable of managing various devices, supporting specific label readers, and connecting via Wi-Fi.
• Software development. We created an admin panel for controller maintenance, access management, and user management, along with a user-friendly mobile app with access point opening and over-the-air firmware update features.
• System configuration. We configured business and system monitoring for essential metrics.

A mobile app of the Propuskator access control system

With this setup, we launched the minimum viable product IoT with an affiliated group of users and a single ACS system distributor. Almost instantly, we began receiving feedback and feature requests, which catalyzed a series of subsequent stages. A year post-launch, we:

• Expanded connection options, including Wi-Fi, GSM, Ethernet, RS-485
• Universalized the reader connection interface for compatibility with modern readers
• Enhanced firmware with settings for various equipment and operating modes
• Improved admin panel for efficient label distribution to over 1,000 residents
• Implemented access point grouping, NFC tag management, multi-account support, data import and export via CSV, and user registration via QR codes
• Enabled access point management through IoT voice recognition, phone calls, and a Telegram bot
• Integrated with video surveillance systems

Controlling access to several locations via the Propuskator ACS

These developments are just a portion of the numerous enhancements our company made, each inspired by user feedback.

Launching the ACS Propuskator as soon as possible allowed us to identify many new tasks and functions needed by our clients — ACS integrators — as well as residents and end users. The MVP launch revealed a distinct B2C niche, leading us to develop a solution based on the existing controller and the free 2Smart Cloud app for private users.

Kostiantyn Oliynyk

Head of IoT at Webbylab

Proving their worth over time, the first controllers from our MVP continue to work. It shows that when you build an MVP IoT product, you’re not just using it as a starting point but as a foundation for developing a complete, fully-featured solution.

Develop Your IoT-based MVP with WebbyLab

IoT-based minimum viable product development is a strategic starting point. It lets you test your ideas with your audience before committing to costly full-scale product creation.

If you’re just starting your IoT project and need a team to handle MVP development, WebbyLab is here to help. Reach out to us and access our profound IoT expertise, proven by numerous successful solutions like Propuskator and 2Smart Cloud.

If you’re just starting your IoT project and need a team to handle MVP development, WebbyLab is here to help. Reach out to us and access our profound IoT expertise, proven by numerous successful solutions like Propuskator and 2Smart Cloud.